Me­suma: Sales drop af­ter OCM deal ex­pired

The Sun (Malaysia) - - NEWS WITHOUT BORDERS -

KUALA LUMPUR: There was a sig­nif­i­cant drop in the to­tal an­nual sales of a sport­ing equip­ment and ap­parel com­pany af­ter the ex­piry of a spon­sor­ship agree­ment with the Olympic Coun­cil of Malaysia (OCM), a High Court heard yes­ter­day.

V. Shan­mu­ganathan, an au­di­tor who also per­forms the func­tion of ex­ter­nal au­di­tor for com­pa­nies, said he no­ticed the plain­tiff, Me­suma Sports Sdn Bhd’s fi­nan­cial state­ment from year 2013 to 2015 and there was a sig­nif­i­cant drop in the to­tal an­nual sales.

“As there was a cor­re­la­tion be­tween the spon­sor­ship agree­ment en­tered and the com­pany’s to­tal an­nual sales, I be­lieve that such a drop in the plain­tiff’s to­tal an­nual sales hap­pened as a re­sult of the non-ex­ten­sion of the spon­sor­ship be­tween Me­suma and OCM,” said Shan­mu­ganathan.

Shan­mu­ganathan was tes­ti­fy­ing in a civil suit filed by Me­suma against OCM for al­leged breach of con­tract.

The first ever law­suit faced by OCM in its 60-year his­tory be­gan on Mon­day.

Ac­cord­ing to the wit­ness state­ment of Heng Kiah Choong, a con­sul­tant of the com­pany, there was no con­fir­ma­tion on the ex­ten­sion of the spon­sor­ship de­spite sev­eral follow-ups, through letters dated Oct 23, 2013 and Oct 29, 2013.

“On March 14, 2014, OCM wrote to Me­suma, in­form­ing the plain­tiff it had re­ceived an of­fer from a third party for a fresh spon­sor­ship of the of­fi­cial sports at­tire for a seven-year spon­sor­ship pe­riod from Jan 1, 2014 till Dec 12, 2020.”

Heng stated that OCM had fur­ther given no­tice in the same let­ter to ex­er­cise its first of right to re­fusal within 21 days, fail­ing which, the plain­tiff would be deemed to have waived its rights to ex­er­cise “first re­fusal”.

As they were in­ter­ested to con­tinue spon­sor­ship, they in­formed through a let­ter dated April 4, 2014 of their wish to ex­er­cise their rights but there was no re­ply.

The sports brand filed a suit against OCM af­ter a new spon­sor was al­legedly ap­pointed for the pro­vi­sion of sport­ing at­tire for the Malaysian con­tin­gent par­tic­i­pat­ing in multi sports events.

Me­suma claimed that in do­ing so they were not given the op­por­tu­nity of ex­er­cis­ing their right of first re­fusal which was a con­trac­tual term in their agree­ment with OCM.

The case is be­ing heard by Judge Datuk Zaki Ab­dul Wa­hab.

Maya Heng, man­ager for the sports brand, was the sec­ond wit­ness who gave ev­i­dence and was cross-ex­am­ined on Mon­day.

Heng claimed that they were the ex­clu­sive of­fi­cial at­tire spon­sor for the Malaysian con­tin­gent dur­ing the pe­riod of the spon­sor­ship.

The trial con­tin­ues to­day.

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